Samsung leaves family-run lobby after 'Rasputin' scandal

A Samsung official told Xinhua news agency that the country's largest family-run conglomerate, officially offered to leave the Federation of Korean Industries -- a business community that speaks for over 600 big corporations.IANS | February 06, 2017, 16:00 IST

SEOUL: Samsung Electronics on Monday broke away from South Korea's largest business lobby composed of a large family-owned business conglomerate (chaebol) after the presidential scandal fuelled calls for the break-up, a media report said.

A Samsung official told Xinhua news agency that the country's largest family-run conglomerate, officially offered to leave the Federation of Korean Industries -- a business community that speaks for over 600 big corporations.

Samsung Electronics Vice Chairman Lee Jae-yong appeared at a December 6, 2016 parliamentary hearing, the first to grill all involved in the 'Rasputin' scandal that led to the impeachment of President Park Geun-hye.

During the hearing, Lee vowed to leave the FKI and stop paying membership fees.

Lee was suspected of bribing Park's longtime confidante Choi Soon-sil, who is at the centre of the scandal, in return for getting support from the country's national pension fund for the 2015 merger of two Samsung units to create a de-facto holding company.

It was very crucial to Lee to inherit the group's overall management control from his ailing father Chairman Lee Kun-hee, who has been hospitalised for over two and a half years after a heart attack.

An independent counsel team, which is investigating the scandal, sought to detain Lee in January, but it was rejected by a Seoul court.

The team allegedly plans to seek an arrest warrant once again for Lee in February later.

The chaebol lobby is also accused of providing money to conservative civic groups to mobilise elderly protesters in pro-government rallies at the request of the presidential Blue House.

LG Group, South Korea's No 4 conglomerate, left the FKI on December 27, 2016 becoming the first to do so among the top four chaebols.

SK Group and CJ Group would follow suit given that their heads indicated departure from it during the National Assembly hearing. SK is the third-largest business group.

The departures would put the survival of the FKI at risk as top four chaebols, including Samsung, Hyundai, SK and LG, account for more than two-thirds of total membership dues.